n 2004, Blockbuster had 60,000 employees, 9,000 stores worldwide and $5.9 billion in revenue. But Blockbuster became too comfortable with their success and failed to adapt to the upcoming consumer demands of the video market.
Meanwhile, competitors were aggressively exploring new ways to bring video to consumers. The market shifted toward on-demand video streaming leaving Blockbuster as a footnote in history.
Successful companies continually look for future opportunities and are adaptable enough to invest in the technology to drive growth and transformation. Companies must innovate to stay competitive in today's economy – the food and beverage industry is a prime example.
The single greatest opportunity that food executives have to drive profits and address growing resource concerns is food waste. The United States alone spends $218 billion each year growing, processing and transporting food that is never eaten. And that financial impact is felt throughout the supply chain: farms lose $15 billion, manufacturers lose $2 billion, and consumer-facing businesses lose $57 billion. The other $144 billion is incurred by consumers who pay retail prices for the food.
Reducing food waste by just 20 percent could create $100 billion in economic value over ten years and reduce annual water use by 1.6 trillion gallons, according to the 2016 ReFED report.
One of the challenges food companies face is how to maximize food quality and safety while also balancing the many costs associated with managing operations. Consumers demand high quality food products at lower prices. Meanwhile, the costs related to production and resources needed are rising. How can we optimize performance without compromising food safety and quality?
As in the video delivery market, technology capabilities in the food industry are growing at a rapid pace, challenging this conventional notion. These advances are building to once-in-a-lifetime opportunities for transformative change in our food system.
What if we could capture and analyze data that would enable us to predict consumer demand and adjust our food production for better yields? What if we could track the location and temperature of our products across the food supply chain to prevent food spoilage? What about monitoring the health of our livestock to prevent a contagious disease from spreading in herds?
We can now. Sensor and auditing technology has become more sophisticated over the past decade, not only capturing data points but also communicating with other systems to automate solutions. The internet of things is revolutionizing the food industry.
New services now allow multiple users to monitor key performance indicators on lines, within packaging rooms, within packaging plants and the ability to compare data and benchmarks at different locations. The technology discovers inefficiencies that would otherwise be hidden among the tremendous amounts of data being collected. Once discovered, they can be managed and fixed in real-time.
Our own CogniPRO™ Focus system is a great example of this work, which uses a photo-capturing method that records and averages the amount of premium meat found on turkey carcasses. CogniPRO Focus provides the line worker real-time feedback on their cutting performance and premium meat yield, allowing them to adjust and optimize their deboning and cutting techniques while they work. Producing better yield has a huge impact: not only producing less waste but also providing the opportunity to harvest more premium breast meat, which is more desirable. Hand-separated meat sells for roughly three times the price of mechanically separated turkey.
Data analytics allows food companies to prevent waste in ways that were unimaginable in the past. It lets us pinpoint inefficiencies in our supply chains and take action, making our food supply chain more resilient and food operations more efficient.
Since the food system is dynamic and complex, studying individual data points can only provide a narrow view of inefficiencies. Instead, we need to take a systems approach where we analyze various data from different sources to drive results.
“Now is the time to explore the opportunities afforded by data and the internet of things. It's time to think big.”
We cannot stop food waste from impacting the food industry’s profits without an investment in technology. Now is the time to explore the opportunities afforded by data and the internet of things. It's time to think big.
The potential benefits to our society and our economy are too great to ignore. For every $1 that companies invest in eliminating food waste, they collect an average of a whopping $14 in return, according to a report by the World Resource Institute.
Companies need to start talking about change if they want to drive innovation. Researchers and engineers may see opportunities for improvement from the ground level and need to be a part of the conversation. Connecting with partners throughout the supply chain who have experience and understand the potential return on investment from new, efficient technologies can also help.
In the end, companies have a choice: become the Blockbuster of the food industry or decide to step out of the comfort zone and innovate for the betterment of us all.